Returns to information technology outsourcing

Information Systems Research

Volumn 22, Issue 4, 2011, Pages 824-840

  Han, Kunsoo ^a   Kauffman, Robert J ^b   Nault, Barrie R ^c  

^a MCGILL UNIVERSITY   (Canada)

^b ARIZONA STATE UNIVERSITY   (United States)

^c UNIVERSITY OF CALGARY   (Canada)

Author keywords

Economic analysis; Industry analysis; Information technology; IT impacts; IT intensity; IT outsourcing; Output elasticity; Production function; Production theory; Productivity

Indexed keywords

EID: 79951939874     PISSN: 10477047     EISSN: 15265536     Source Type: Journal    
DOI: 10.1287/isre.1100.0290     Document Type: Article

References (66)

1. Abraham, K. G., S. K. Taylor. 1996. Firms' use of outside contractors: Theory and evidence. J. Labor Econom. 14(3) 394-424.
2. Agrawal, M., R. Kishore, H. R. Rao. 2006. Market reactions to e-business outsourcing announcements: An event study. Inform. Management 43(7) 861-873.
3. Amiti, M., S.-J. Wei. 2009. Service offshoring and productivity: Evidence from the US. World Econom. 32(2) 203-220.
4. Ang, S., D. W. Straub. 1998. Production and transaction economies and IS outsourcing: A study of the U.S. banking industry. MIS Quart. 22(4) 535-552.
5. Aron, R., E. K. Clemons, S. Reddi. 2005. Just right outsourcing: Understanding and managing risk. J. Management Inform. Systems 22(2) 37-55.
6. Aubert, B. A., S. Rivard, M. Patry. 2004. A transaction cost model of IT outsourcing. Inform. Management 41(7) 921-932.
7. Babaie, E. 2002. IT services market definitions guide. Gartner Dataquest Guide. Gartner, Stamford, CT.
8. Banker, R. D., J. Kalvenes, R. A. Patterson. 2006. Information technology, contract completeness, and buyer-supplier relationships. Inform. Systems Res. 17(2) 180-193.
9. Bartel, A., S. Lach, N. Sicherman. 2006. Outsourcing and technological change. Working paper, National Bureau of Economic Research, Cambridge, MA.
10. Barthelemy, J. 2001. The hidden costs of IT outsourcing. MIT Sloan Management Rev. 42(3) 60-69.
11. Baum, C. F., M. E. Schaffer, S. Stillman. 2003. Instrumental variables and GMM: Estimation and testing. Stata J. 3(1) 1-31.
12. Beck, N., J. N. Katz. 1995. What to do (and not to do) with timeseries cross-section data. Amer. Political Sci. Rev. 89(3) 634-647.
13. Benaroch, M., Q. Dai, R. J. Kauffman. 2010. Should we go our own way? Backsourcing flexibility in IT services contracts. J. Management Inform. Systems 26(4) 317-358
14. Bharadwaj, A. S. 2000. A resource-based perspective on information technology capability and firm performance: An empirical investigation. MIS Quart. 24(1) 169-196.
15. Bharadwaj, A. S., V. Sambamurthy, R. W. Zmud. 1999. IT capabilities: Theoretical perspectives and empirical operationalization. P. De, J. I. DeGross, eds. Proc. Internat. Conf. Inform. Systems, Association for Computing Machinery, New York, 378-385.
16. Boynton, A. C., R. W. Zmud, G. C. Jacobs. 1994. The influence of IT management practice on IT use in large organizations. MIS Quart. 18(3) 299-318.
17. Brynjolfsson, E., L. M. Hitt. 1995. Information technology as a factor of production: The role of differences among firms. Econom. Innovations New Tech. 3(4) 183-199.
18. Brynjolfsson, E., L. M. Hitt. 1996. Paradox lost? Firm-level evidence on the returns to information systems spending. Management Sci. 42(4) 541-558.
19. Chen, X., S. Lin, W. R. Reed. 2005. Another look at what do with time-series cross-section data. Working paper, University of Oklahoma, Norman.
20. Cheng, Z., B. R. Nault. 2007. Industry level supplier-driven IT spillovers. Management Sci. 53(8) 1199-1216.
21. Clemons, E. K., L. M. Hitt, E. M. Snir. 2001. A risk analysis framework for information technology outsourcing. Working paper, The Wharton School, University of Pennsylvania, Philadelphia.
22. Clogg, C. C., E. Petkova, A. Haritou. 1995. Statistical methods for comparing regression coefficients between models. Amer. J. Sociol. 100(5) 1261-1293.
23. Cohen, W. M., D. A. Levinthal. 1990. Absorptive capacity: A new perspective on learning and innovation. Admin. Sci. Quart. 35(1) 128-152.
24. De Souza, R., J. Hale, F. Ng, N. Akimasa. 2007. IT services forecast, worldwide, 2007-2011 update. Gartner Dataquest Alert. Gartner, Stamford, CT. http://rte.gartner.com/DisplayDocument? id=530210&ref=g_sitelink.
25. De Souza, R., E. Babaie, K. Hale, J. Heng, R. Narisawa. 2003. IT services market five-year growth forecast revised. Gartner Dataquest Alert. Gartner, Stamford, CT. http://www.gartner.com/DisplayDocument?id=395978.
26. Dewan, S., K. L. Kraemer. 2000. Information technology and the productivity paradox: Evidence from country-level data. Management Sci. 46(4) 548-562.
27. Dewan, S., C. K. Min. 1997. The substitution of information technology for other factors of production: A firm level analysis. Management Sci. 43(12) 1660-1675.
28. Dumagan, J., G. Gill, C. Ingram. 2003. Industry-level effects of information technology use on overall productivity. Digital Economy 2003, U.S. Department of Commerce, Washington, DC. http://www.esa.doc.gov/reports/DE/Chap4.pdf.
29. Felipe, J., C. A. Holz. 2001. Why do aggregate production functions work? Fisher's simulations, Shaikh's identity and some new results. Internat. J. Appl. Econom. 15(3) 261-285.
30. Fisher, F. M. 1969. The existence of aggregate production functions. Econometrica 37(4) 553-577.
31. Fisher, F. M. 1971. Aggregate production functions and the explanation of wages: A simulation experiment. Rev. Econom. Statist. 53(4) 305-325.
32. Fixler, D. J., D. Siegel. 1999. Outsourcing and productivity growth in services. Structural Change Econom. Dynam. 10(2) 177-194.
33. Greene, W. H. 2000. Econometric Analysis, 4th ed. Prentice-Hall, Upper Saddle River, NJ.
34. Gordon, R. J. 2000. Does the "new economy" measure up to the great inventions of the past? J. Econom. Perspect. 14(4) 49-74.
35. Grover, V., M. J. Cheon, J. T. C. Teng. 1996. The effect of service quality and partnership on the outsourcing of information systems functions. J. Management Inform. Systems 12(4) 89-116.
36. Harper, M. J. 1997. Estimating capital inputs for productivity measurement: An overview of concepts and methods. U.S. Bureau of Labor Statistics, Washington, DC.
37. Harper, M. J. 1999. Estimating capital inputs for productivity measurement: An overview of U.S. concepts and methods. Internat. Statist. Rev./Rev. Internat. Statist. 67(3) 327-337.
38. Hsiao, C. 2003. Analysis of Panel Data, 2nd ed. Cambridge University Press, Cambridge, MA.
39. InformationWeek. 2006. Multiyear comparisons of InformationWeek 500 survey data reveal IT trends. InformationWeek (September 12) http://www.informationweek.com/news/global-cio/ showArticle.jhtml?articleID=192600107.
40. Koenker, R., K. F. Hallock. 2001. Quantile regression. J. Econom. Perspect. 15(4) 143-156.
41. Kudyba, S., R. Diwan. 2002. Research report: Increasing returns to information technology. Inform. Systems Res. 13(1) 104-111.
42. Lacity, M. C., R. Hirschheim. 1995. Beyond the Information Systems Outsourcing Bandwagon: The Insourcing Response. John Wiley & Sons, Chichester, UK.
43. Lacity, M. C., L. P. Willcocks. 1998. An empirical investigation of information technology sourcing practices: Lessons from experience. MIS Quart. 22(3) 363-408.
44. Lacity, M. C., L. P. Willcocks. 2000. Survey of IT outsourcing experiences in U.S. and U.K. organizations. J. Global Inform. Management 8(2) 5-23.
45. Lee, J. N., Y. G. Kim. 1999. Effect of partnership quality on IS outsourcing success: Conceptual framework and empirical validation. J. Management Inform. Systems 15(4) 29-61.
46. Levina, N., J. W. Ross. 2003. From the vendor's perspective: Exploring the value proposition in information technology outsourcing. MIS Quart. 27(3) 331-364.
47. Levinsohn, J., Petrin, A. 2003. Estimating production functions using inputs to control unobservables. Rev. Econom. Stud. 70(2) 317-341.
48. Linder, J. C. 2004. Transformational outsourcing. MIT Sloan Management Rev. 45(2) 52-58.
49. Loh, L., N. Venkatraman. 1992. Determinants of information technology outsourcing: A cross-sectional analysis. J. Management Inform. Systems 9(1) 7-24.
50. Malone, T. W., J. Yates, R. I. Benjamin. 1987. Electronic markets and electronic hierarchies: Effects of information technologies on market structure and corporate strategies. Comm. ACM 30(6) 484-497.
51. Matlus, R., M. Andersen. 2003. Weigh the costs of moving to outsourced service delivery. Research report, Gartner, Stamford, CT. http://www.gartner.com/DisplayDocument?id=391693.
52. McDougall, P. 2006. In depth: When outsourcing goes bad. Information Week (June 19) http://www.informationweek.com/story/ showArticle.jhtml?articleID=189500043.
53. Mithas, S., J. Whitaker. 2007. Is the world flat or spiky? Information intensity, skills, and global service disaggregation. Inform. Systems Res. 18(3) 237-259.
54. Mittal, N., B. R. Nault. 2009. Investments in information technology: Indirect effects and information technology intensity. Inform. Systems Res. 20(1) 140-154.
55. Oliner, S. D., D. E. Sichel. 2000. The resurgence of growth in the late 1990s: Is information technology the story? J. Econom. Perspect. 14(4) 3-22.
56. Olsen, K. B. 2006. Productivity impacts of offshoring and outsourcing: A review. Working Paper 2006/1, Directorate for Science, Technology, and Industry, OECD, Paris.
57. Parker, R., B. Grimm. 1999. Recognition of business and government expenditures for software as investment: Methodology and quantitative impacts, 1959-1998. Bureau of Economic Analysis, Washington, DC. http://www.bea.gov/papers/pdf/ software.pdf.
58. Plumper, T., V. E. Troeger. 2007. Efficient estimation of timeinvariant and rarely changing variables in finite sample panel analyses with unit fixed effects. Political Anal. 15(2) 124-139.
59. Prasad, B., P. Harker. 1997. Examining the contribution of information technology toward productivity and profitability in U.S. retail banking. Working Paper, Wharton School, University of Pennsylvania, Philadelphia.
60. Siegel, D., Z. Griliches. 1992. Purchased services, outsourcing, computers, and productivity in manufacturing. Z. Grilliches, ed. Output Measurement in the Service Sectors. University of Chicago Press, Chicago, 429-458.
61. Stiroh, K. 2002. Information technology and the U.S. productivity revival: What do the industry data say? Amer. Econom. Rev. 92(5) 1559-1576.
62. ten Raa, T., E. N. Wolff. 2001. Outsourcing of services and the productivity recovery in U.S. manufacturing in the 1980s and 1990s. J. Productivity Anal. 16(2) 149-165.
63. Toolbox.com. 2004. 2004 ITtoolbox outsourcing survey. Retrieved June 8, 2010, http://hosteddocs.ittoolbox.com/dell1_survey .pdf.
64. Williamson, O. E. 1985. The Economic Institutions of Capitalism. Free Press, New York.
65. Wooldridge, J. M. 2002. Econometric Analysis of Cross Section and Panel Data. MIT Press, Cambridge, MA.
66. Yaffee, R. 2003. A primer for panel data analysis. Retrieved January 22, 2010, http://www.nyu.edu/its/pubs/connect/fall03/ yaffee_primer.html.